Monday, November 13, 2006

On Monday morning, November 13, 2006, during its "Morning Edition" radio show, National Public Radio broadcast a report entitled "Seniors Struggle over Medicare Drug Gap Coverage", by Joanne Silberner, regarding the significant cost exposure by Medicare recipients for prescription medications under the provisions that took effect in 2006. You can read and hear the NPR story here.

The article recites individual seniors' situations where the costs of their medications increased after the initial Medicare drug coverage was exhausted, but before their further personal deductible payment was achieved. This is the so-called "doughnut hole" in Medicare coverage.

This problem was revealed in 2004, after the adoption of the new Medicare Prescription Drug Program. For example, see an article entitled "Report Warns of Medicare Drug Coverage Gaps -- 2006 Benefit Could Anger Seniors Expecting More Help With Drug Costs, Analyst Says", by Todd Zwillich, which appeared here on June 1, 2004, as posted on WebMD:

Medicare began its controversial prescription-drug discount plan today, although some analysts are already looking ahead to 2006 when the program's paid drug benefit begins. And some are warning that many seniors may find far lower benefits than they expect.

A new report issued Tuesday warns that substantial numbers of elderly and disabled Medicare beneficiaries can expect high drug expenses even after the program begins in 19 months. Some, especially those with more than one chronic illness requiring medication, may still incur thousands of dollars in out-of-pocket costs, it concludes.

A CBS Evening News story broadcast nationally on July 26, 2006, entitled "Medicare's 'Doughnut Hole' -- Millions Of Seniors Are Hitting A Gap Where They Pay All Drug Costs", found here, explained the problem:

Medicare Part D is providing prescription drug coverage to millions of older Americans. But ever since the program went into effect in January, there's been an epidemic of confusion and headaches. As CBS News correspondent Wyatt Andrews reports, here comes another one: the "doughnut hole." * * *

The problem is . . . a gap in coverage called the "doughnut hole" — in which seniors pay for all of their drugs themselves. * * *

For all patients, Medicare covers 75 percent of the first $2,250 worth of drugs. But after that, coverage drops to zero — and doesn't resume until the patient hits $5,100 in expenses. Then Medicare kicks in again, paying 95 percent of costs. But it's this gap — of almost $3,000 — that many sick and disabled seniors call unaffordable.

The CBS Evening News report noted that Medicare officials offered two suggestions for seniors hoping to avoid the "doughnut hole":

Switch to lower-cost generics if possible and you won't hit the hole so fast.

Also, this November, you can also switch plans: Choose one that might be more expensive but offers coverage in the coverage gap.

The Henry J. Kaiser Family Foundation noted here the potential political effects of the "doughnut hole", which many seniors had eaten into before the General Election.

The Center for Medicare Advocacy, Inc., offers a detailed explanation, entitled "Calculating the Medicare Part D Donut Hole", found here, as to the "doughnut hole" principles and personal calculations, which can be complex.

The NPR article focuses on Medicare beneficiaries' actual responses to the increased financial exposure now that the initial coverage has been exhausted for them, and offers other tips how to cope.

According to a study by Consumers Union, people usually can find better prices outside their Medicare prescription drug plans.

But there's a good reason not to make that move, according to Pete Sikora, one of the Consumers Union study authors.

"We generally recommend that people shop within their plan, that they don't go outside of the plan," Sikora says.

That's because the drugs have to be purchased through their Medicare plans to count towards the amount needed to restart the coverage.

The NPR article is accompanied by other online resources with information about low-cost drugs or renegotiation of Medicare drug plans, as follows:

Benefit Gap Surprises Medicare Drug-Plan Participant (July 25, 2006) -- "There's a problem with the new Medicare drug-benefit plan: a gap in coverage. The gap occurs when the cost of prescriptions rises to a certain level. Critics of the plan have been issuing warnings about this gap since before the legislation was signed."

Medicare Premiums Set to Rise for All (September 13, 2006) -- "The head of the Medicare program has announced that next year's premiums will increase. And for the first time, richer people will have to pay more than others. Of the 42 million Americans who use Medicare, officials estimate that 1.5 million will face higher premiums because of their income."

Two years ago, The Commonwealth Fund asked the question: "Could senior citizens in the United States receive full prescription drug coverage under Medicare, without causing any increase in Medicare spending?"Yes, answered a study entitled, "Doughnut Holes and Price Controls" (Health Affairs Web Exclusive, July 21, 2004), conducted by researchers at Johns Hopkins University and Pennsylvania State University, with support from The Commonwealth Fund and the Robert Wood Johnson Foundation.

Seniors could receive full prescription drug coverage, without any "doughnut hole", ifprescription drug prices in the United States were typical of the prices in Canada, United Kingdom, and France. That study is described here.

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